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Green methanol gains traction

Decarbonization of fuel and polymer production is creating new markets for methanol

by Craig Bettenhausen
November 2, 2022 | A version of this story appeared in Volume 100, Issue 39


A distillation column rises above a small chemical plant.
Credit: Carbon Recycling International
A 70-meter-tall distillation column rises above the 84 metric ton CO2-to-methanol plant in Henan Province, China.

The green-methanol maker Carbon Recycling International (CRI) has begun production at what it calls the world’s largest carbon-dioxide-to-methanol plant. Separately, Mitsubishi Gas Chemical is exploring a green methanol project with Cement Australia, a joint venture between the construction material firms Heidelberg Materials and Holcim.

The CRI facility, located in China’s Henan Province, catalytically combines a hydrogen byproduct from nearby steelmaking with CO2 captured from mineral lime production. The plant is expected to make 110,000 metric tons (t) of methanol per year, capturing 160,000 t of CO2 per year along the way. It was constructed over a little more than two years on a site owned by the chemical maker Henan Shuncheng Group. Shuncheng holds a controlling majority in Shunli, the company that owns and will operate the plant going forward.

Methanol in China is usually made from coal, according to Kai Pflug, a management consultant focused on China’s chemical industry. “The rise in methanol demand in China mainly comes from conversion of methanol to olefins,” Pflug says, with polypropylene being an important downstream product. Though the CRI plant will bring a useful volume of low-carbon methanol onto the market, Pflug says this project is mostly about Shuncheng and the larger industry getting acquainted with the new technology.

Mitsubishi’s effort in Australia is at a much earlier stage, with no specific targets set for capacity or commissioning date. The idea is to capture CO2 from cement production in Gladstone, a small city on the Northwestern coast of the country, and use proprietary Mitsubishi catalysts to react it with green hydrogen, which is made by splitting water with renewable electricity. The firms expect to include other public and private industrial operations in the plan they’re developing for the area.

The project is part of a larger circular chemistry push at Mitsubishi, wherein the firm aims to convert CO2, plastics, biomass, and other waste streams into methanol, which it then plans to sell and use a feedstock for fuels, chemicals, and power generation.

Irina Tsukerman, president of the strategic advisory firm Scarab Rising, says that the total world market for green methanol will grow from $122 million in 2021 to more than $3 billion by 2031. Globally, she says, the big driver of that expansion will be methanol’s use as a fuel for heavy-duty oceangoing vessels. Major logistics players including Cosco Shipping Bulk, China Merchants Group, and Maersk are investing heavily in methanol-fueled cargo ships as a way to decarbonize and reduce their reliance on fossil fuels.

Asia, Australia, and Europe are highly engaged in developing the “methanol economy,” Tsukerman says, whereas the corn lobby has kept ethanol at the top of the commodity alcohol heap in the US. “While green methanol has been around for years, due to recent strict ESG [environmental, social, and governance] regulations, the demand has started to grow steadily, affecting the market,” she says.



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